Five Ways to Grow a Merchant Processing Program

Nancy Brook
May 21, 2012 | COMMENTS

Would your credit union like to deepen member relationships, attract new business customers, and grow non-interest income? By leveraging your credit union’s merchant processing program, you can accomplish all of these goals.

Whether a credit union runs its own merchant processing program or uses the services of an outside provider, merchant outreach is key to obtaining new members and gaining greater visibility in the local business community.

Below are five ways your credit union can develop a more successful merchant processing program.

Staff Education

If employees are not comfortable referring business customers for merchant processing, they may not understand the product well enough. Regular staff training sessions, such as breakfast meetings or lunch-and-learn sessions, can help educate employees. They’ll learn how to ask the right questions to gain a referral or how to identify members with business accounts through the credit union that may be doing their merchant processing with another financial institution.

Also, consider developing online training resources to support ongoing staff learning. The end goal is to make your employees fully comfortable with starting the conversation with merchants that can lead to additional business for your credit union.

Motivate and Reward

Incentives, typically in the form of cash, are always effective. One approach is to provide a financial incentive for each referral that yields a new merchant processing customer. Offer quarterly contests to help build excitement and promote friendly competition among employees and branch locations.

Branch Referral Goals

Have your senior management establish goals of at least two referrals per branch per month. Each month, as part of the performance review, the achievement of these goals should be reported to management.

Have the highest-performing branches share the secrets of their success with the lower-performing ones.

Growing Business DDAs

Encourage your credit union’s business development staff not only to call on current credit union members, but also to call credit union members who do not have their business accounts with the credit union. This approach is proven to grow a credit union’s
overall merchant revenue, as well as open the door to discussions of the credit union’s other products. It also presents the opportunity to offer incentives to new merchant customers to switch their checking accounts to your credit union. In this type of contact, the business development staff can take the opportunity to compare the merchant’s current processing agreement with your institution’s merchant services program. Have your operations employees make joint calls with the business development staff, which will increase the success rate for such sales calls.

Review and Critique Your Program

Whether you are managing your own merchant program or working with an outside processing partner, make sure you understand the terms of your current contract and any auto-renew provisions. If you plan to review alternatives, start about a year in advance of your contract expiration date to give yourself ample time. Key considerations include a vendor’s commitment to provide sales representatives in your area, the level of support when it comes to business development, and the percentage of revenue share for credit union-referred business and cold-call business. For some credit unions, switching merchant processing partners has yielded a doubling of revenue or even greater gains.

Nancy Brook is a business development executive with Vantiv LLC. Reprinted with permission from the Texas Credit Union League (www.tcul.coop).